Can you owe money from a Stocks and Shares ISA?

r_heath

Hi MSE Forum,
I'm very new to investing and am looking at stocks and shares ISA's. I understand that you can lose all of the money you have originally invested (e.g. invest 5k, lose all 5k with bad returns). However, can your balance become negative - i.e. you end up OWING money to the ISA for bad stock performance? On a slightly separate note, what happens if you have had negative returns resulting in an ISA balance of £0, do you still keep the shares even though you have no money left? Or does this feed into the first question, you end up keeping the stocks but start to see negative money -£400 (etc)?

kuratowski

If you are new to investing then you should not buy individual stocks, as a beginner it is more sensible to buy multi-asset funds.

These funds come in a variety of risk levels, but even at the most "adventurous" risk level, the value is not going to fall to £0k.  You can lose some of your money though, and money should only be invested with a minimum time period of 5 years, and 10+ years is more suitable.

The type of investments you can hold in an ISA cannot take negative values.

Before you start investing: have you paid off any debts (apart from mortgage).  Do you have sufficient cash reserves set aside as an emergency fund.

Also you are looking at a stocks & shares ISA but for many people investing into a pension scheme is more beneficial.  Do you have a workplace pension?

r_heath

Great - thanks for the advice. I'll have a look into those and beginner funds.

In terms of debt, no debt and have got a cash nest that is about 3 times monthly salary. Yes I have a workplace pension that I'm paying into every month, so this stock and shares ISA I'm looking into is separate to my pension and my cash ISA.

kuratowski

If you want to get more detailed guidance, it would be worth posting more details, such as your age and income, pension contribution rates (yours and employer's) and how much your pension pot is currently worth.

Also, I think you're saying you don't own your own home yet?  (Based on no debt/no mortgage - could be reading too much here.)  If you're saving towards a deposit, the usual advice is to stick to cash savings and don't take put your deposit at risk.

Albermarle

Great - thanks for the advice. I'll have a look into those and beginner funds

There are no such things as 'beginner funds' .

What was suggested is that a simple low cost  multi asset fund are the most  suitable for beginner investors .

In reality they are the go to investment for many investors , new and more experienced.